**Milling Machine Cost Analysis**A milling machine equipped with enhanced CNC controls for high-speed machining of free-form parts was purchased two years ago for $195,000. The company is considering upgrading to a recently available, faster model with the capability of controlling up to 8 axes, priced at $240,000. The current machine can be sold in today's market for $105,000. Over the past two years, its operating cost has been $30,000 annually. Determine the value that should be used as P for the currently owned machine.**Options:**- a. $105,000- b. $240,000- c. $30,000- d. $195,000The correct choice is **a. $105,000**.

One of the fundamental analyses in capital budgeting is replacement analysis. Physical…

A milling machine with enhanced CNC controls that allow for high-speed machining of free-form parts was purchased 2 years ago for $195,000. The company wants to purchase a recently available faster model with control up to 8 axes for $240,000. The presently owned machine can be sold today for $105,000. Its operating cost over the past 2 years has been $30,000 per year. The value that should be used as P for the presently owned machine is: (choose one) a. $105,000 Ob. $240,000 О с. $30,000 O d. $195,000

A milling machine with enhanced CNC controls that allow for high-speed machining of free-form parts was purchased 2 years ago for $195,000. The company wants to purchase a recently available faster model with control up to 8 axes for $240,000. The presently owned machine can be sold today for $105,000. Its operating cost over the past 2 years has been $30,000 per year. The value that should be used as P for the presently owned machine is: (choose one) a. $105,000 Ob. $240,000 О с. $30,000 O d. $195,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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